South African Bank Targets Nigerian Market

Absa Group Limited, one of the ‘big four’ consumer banks in South Africa acquiring majority shareholding in Barclays Bank, its parent company’s African assets yesterday indicated interest to enter the Nigerian market.

The financial institution said the move would boost its presence across Africa.

“The bank needs a competitive advantage before it can enter Nigeria, Africa’s second-largest economy and biggest oil producer,” Bloomberg quoted Absa’s Chief Financial Officer, David Hodnett, to have said in an interview in Johannesburg.

The lender could take advantage of its experience in corporate banking, he added.

The bank said last December that it would buy the bulk of Barclays’s African assets in an all-share deal worth 18.3 billion rand.

The economy of Nigeria, Africa’s most populous nation with more than 160 million people, is set to grow 7.2 per cent this year, compared to an average of 5.6 per cent for the rest of sub-Saharan Africa, according to the International Monetary Fund.

Absa is not looking at any of the nationalised Nigerian banks, Hodnett pointed out.

The Asset Management Corporation of Nigeria (AMCON), set up by the federal government to buy bad debts from banks, is seeking to sell the three banks its acquired in 2011 next year.

The banks are Keystone Bank Limited, Mainstreet Bank Limited and Enterprise Bank. They were acquired through a bridging process after an intervention by the regulators. Already, financial and legal advisers to the transaction had been selected by AMCON.

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